Give Renewable Energy Tax Credits A Boost To Soothe The Markets

“You can’t always get what you want, but if you try sometimes, you just might find… you get what you need.”
— Rolling Stones, from their 1969 album, Let It Bleed

Washington officials from the White House on down are doing their best to slay the mortgage monster that keeps popping up, or at least convince investors that they have put this credit nightmare to an end. The Treasury has spooked markets even more, leaving it to legislators to grow up and show that there is something to look forward to in the economic future with renewable energy tax credits.

That’s right, amid all the uncertainty about how much banks are willing to lend each other and consumers, in turn driving central banks to pump $180 billion into the global financial system, energy policy nudged to the front for at least a brief period this week.

Oil is back up despite the market having breathed a sigh of relief when Hurricane Ike’s damage to Gulf of Mexico oil and gas installations turned out to be limited. Gasoline rose during that same period, because Ike didn’t play as nice with key refineries in Texas.

So Mother Nature has a hand in NYMEX hydrocarbon trading, and Father Fed clearly can encourage or discourage investors.

But where Washington can really move markets today is in the energy sector, and congressional advances on offshore drilling and renewable energy tax credits are now challenging Wall Street chaos for headlines.

H.R. 6899, the 290-page energy bill that passed late Monday night, is “cruel,” House Republican Thelma Drake of Virginia said dramatically, though it was hailed by Democratic Speaker of the House Nancy Pelosi as a “bold step forward that will help end our dependence on foreign oil.”

As you might guess, many G.O.P. leaders were negative, with House Minority leader John Boehner calling it, “another ‘no-energy’ energy bill,” though H.R. 6899 ends the total moratorium on new offshore drilling and reasonably puts exact limits in the hands of individual states.

The bill has been dubbed the Comprehensive American Energy Security and Consumer Protection Act, in order to inject the notion that sound energy policy can provide some succor from market mayhem.

We hope that proves true as this legislation moves through to the executive branch.

Renewable Energy Tax Credits: Passing the Senate

Since the Senate is a tougher political hill to climb and veto-happy President Bush stands ready to cut the House’s plans to shreds, it’s far from certain that the bill Pelosi has championed will become law. But last Thursday, September 11, a Senate coalition called the Gang of 10 doubled in size, with its 20 bipartisan members keen to let states decide on drilling while stimulating renewables and closing fossil fuel tax loopholes.

And as of Thursday the 18th, reports from D.C. say the Senate Finance Committee is ready to pass a tax reform package that includes $17 billion in renewable energy tax credits. This energy measure is part of a well-placed series of steps like extending the child tax credit, giving relief to hurricane and flood victims, and adjusting the much-maligned alternative minimum tax.

In the full Senate, Republican leaders agreed to halt expansion of a major oil and gas tax break at current levels, getting the upper chamber closer to working out a law in conference with the House, which can then be sent to the President.

So renewable energy is now going not only into the mainstream of American political thought, but it’s also getting paired with the word “relief.”

And both parties in the Senate seem to be getting real at the right time.

Overseas, legislators everywhere from Japan to Germany are coming back from summer recess and pushing through similar measures to stimulate renewable energy progress and national supply security while investors bite their nails.

By locking in renewable energy targets, lawmakers are giving investors a break in the clouds despite today’s tempestuous market.

There’s more to come on international measures that will advance renewable energy and revitalize markets.

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